NZD/USD downside playing out, watch 0.6620

FXStreet (Guatemala) - NZD/USD is currently trading at 0.6641 with a high of 0.6669 and a low of 0.6636.

NZD/USD has been an underperformer of the back of the Fonterra dairy auction and the recently publish jobs data for Q3. The kiwi dropped after the employment change was offering a big miss at -0.4% vs 0.4% expected and 50.9 previous. At the same time, the Participation rate was 68.6% vs an expected 69.3%, while prior was 69.3% and wages growth were also disappointing.

This data is keenly monitored by both the market and the RBNZ and with an already dovish outlook, the December meeting and prospects for a rate cut have been tipped more so into the hands of the doves as the NZ economy continues to struggle. We now await the US data tonight with Fed Yellen speaking, Dudley and Stanley along with the ADP report that as on occasions can be a good indicator as to the result of the government data in the Nonfarm Payrolls that follow in the same week.

After a dismal print last month, this month is expected to be positive. Analysts at TD Securities explained, we expect the US labor market to snap back to life in October with the pace of jobs growth rebounding to a respectable 193K pace (consensus: 180k)," and the analysts added, "While this remains well short of the 250K/monthly pace over the past year, it will nonetheless reflect a meaningful uptick from the subpar 139K average during the prior two months. The unemployment rate should remain unchanged at 5.1%."

NZD/USD levels

Technically, the downside is playing out on the way to 0.6620. This is a level that will be guarding a continuation of the bearish trend with 0.6588 next stop. The 200 SMA on the 4hr is at 0.6605 that may prove some support before a breakout can occur.

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